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Gujarat High Court
Gujarat Water Supply And Sewerage Board vs Pashim Gujarat Vij Cop Ltd on 17 December, 2025
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C/FA/2555/2005 JUDGMENT DATED: 17/12/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2555 of 2005
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE DEVAN M. DESAI
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Approved for Reporting Yes No
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GUJARAT WATER SUPPLY AND SEWERAGE BOARD & ANR.
Versus
PASHIM GUJARAT VIJ COP LTD & ANR.
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Appearance:
MR KH BAXI(150) for the Appellant(s) No. 1,2
MS MAYA S DESAI(285) for the Defendant(s) No. 1
RULE SERVED for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 17/12/2025
ORAL JUDGMENT
1. This appeal is preferred by the appellants - original
defendants under Section 96 of the Code of Civil
Procedure, 1908 (for short, hereinafter referred to as
`the Code') challenging the judgment and decree
dated 29.6.2005 (for short, `the impugned judgment')
passed by the learned Principal Senior Civil Judge,
Surendranagar in Special Civil Suit No.60 of 2001.
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2. Heard learned advocate Mr. K. H. Baxi for the
appellants and learned advocate Ms. Maya Desai for
respondent No.1. Though served, none appeared for
respondent No.2. Perused the record.
3. The facts in brief of the case are as under:
* The respondent No.1 herein - original plaintiff had
filed a suit for recovery of Rs.12,22,548-98 Paisa from
the present appellant Nos.1 and 2 - original defendant
Nos.1 and 2 and present respondent No.2 - original
defendant No.3. As per the case of the plaintiff, the
defendant had undergone Surendranagar underground
gutter project for which defendants demanded 375 KVA
electric load for which an agreement was executed by
defendants in favour of plaintiff. It is contended by
plaintiffs that defendants agreed to pay minimum
charges for the period of 2 years. As defendants did not
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submit test report and did not pay the amount of
deposit though informed, a notice dated 19.3.1998 was
issued and defendants were asked to submit the
report.
* As defendants failed to pay agreed minimum
charges for the period of 1997-98, the suit came to be
filed for recovery of Rs.9,02,017.07 Paisa towards
connection of 375 KVA and R.20,351-91 Paisa towards
connection of 130 KVA. The defendants upon service
of summons appeared and filed Written Statement at
Exhibits 12 and 22 respectively. On the basis of
pleadings, issues were framed at Exhibit 23. Plaintiff
examined Praveenchandra Himmatlal at Exhibit 41 and
Lavjibhai Bhudarbhai Bagadia at Exhibit 75. Defendant
Nos.1 and 2 examined Surendrakumar Motilal,
Assistant engineer at Exhibit 106. Defendant No.3 did
not examine any witness.
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* After considering the evidence, learned Court
below decreed the suit and defendants were jointly and
severally directed to pay an amount of Rs.12,22,548.98
Paisa to the plaintiff with interest at the rate of 9% per
annum from the date of suit till realization.
* Being aggrieved and dissatisfied with the
impugned judgment and decree, original defendant
Nos.1 and 2 - present appellants have filed this appeal.
4. Learned advocate for the appellants, at the outset,
contended that the defendant No.1 is an agent of
defendant No.3 and as defendant No.3, was in need of
electric load for the purpose of laying down
underground sewage project, original defendant No.3 -
Corporation applied for the power supply of 375 KVA
with the plaintiff. The application Exhibit 50 establishes
the aforesaid fact that the application was made by the
Chief Officer, Surendranagar Municipality,
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Surendranagar.
5. It is further contended that the defendant Nos.1 and 2
had never applied for any supply of electric load. It is
contended that though the agreement Exhibits 42 and
43 for 375 KVA and 130 KVA were signed by defendant
Nos.1 and 2, the contracting party is defendant No.3
and the conditions stipulated in the 2 agreements also
contemplate that the consumer, namely; the
Corporation, shall be liable to pay the amount of
minimum guarantee as if the supply is actually
commenced from the date of expiration of said notice
of three months. It is further contended that both the
agreements were signed by the defendant Nos.1 and 2
as agents of defendant No.3 and the terms and
conditions stipulated in both the agreements cannot be
made applicable to the defendant Nos.1 and 2.
6. It is further contended that the entire project was
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budgeted by the Municipality. The defendant Nos.1 and
2 were only to execute the work entrusted by
defendant No.3. After completion of the project, as per
the provisions contained in the Gujarat Water Supply
and Sewerage Board Act, 1978, the site was to be
handed over to defendant No.3. The defendant Nos.1
and 2 are not the ultimate consumer. The ultimate
consumer is defendant No.3. It is, therefore, contended
that the learned trial Court has wrongly held defendant
Nos.1 and 2 liable for the amount of minimum charges.
No other submissions are made except the above.
7. Per contra, learned advocate for the plaintiff -
respondent No.1 herein has supported the judgment
and decree and contended that all defendants have
signed the agreements exhibit 42 and 43 and,
therefore, terms and conditions stipulated in the
agreements are binding to defendant Nos.1 and 2 also.
Learned Advocate for the Plaintiff has taken this Court
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through the Written Statement at exhibit 22 filed by
the Municipality, wherein, it is contended that as per
the order of defendant No.3, defendant Nos.1 and 2
were supposed to carry out the work of underground
sewerage project. Defendant Nos.1 and 2 were
entrusted the work and the work was to be undertaken
under the supervision of defendant Nos.1 and 2. The
sum and substance of the defense of defendant No.3 is
that since the work was not completed by defendant
Nos.1 and 2, defendant Nos.1 and 2 are solely liable for
the amount claimed by plaintiff.
8. It is further contended by learned advocate for the
respondent that the learned trial Court has considered
the undisputed fact that bills were issued in the name
of defendant No.3 but was given to defendant Nos.1
and 2. The defendant Nos.1 and 2 in their oral
deposition have admitted that test report was
supposed to be submitted by them as per agreements
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Exhs.42 and 43. It also comes out on record that during
the cross examination of witness of defendant Nos.1
and 2 that the test report was not submitted by
defendant Nos.1 and 2. Notices Exhs.45 and 46 though
were duly received by defendants were neither replied
to nor acted upon by defendants. Therefore, as per the
Agreements Exhibits 42 and 43, defendants have
rightly been held liable for the minimum charges. No
other submissions are made except the above.
9. I have considered the submissions canvassed by
learned advocates for the parties and perused Record
& Proceedings.
10. The question which is under consideration in the
present appeal is whether the appellants-original
defendant Nos.1 and 2 can be held liable for the breach
of the terms and conditions of Agreements Exhibit 42
and 43, which is undisputedly signed by defendant
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Nos.1 and 2 and not signed by defendant No.3.
11. The preamble of the Agreement indicates that the
contracting parties are the plaintiff and defendant
No.3, namely; Chief Officer, Surendranagar
Municipality, Surendranagar. It is also an admitted fact
coming out from perusal of Written Statement of
defendants that defendant Nos.1 and 2 acted as an
agent of defendant No.3 and the work of defendant
No.3 under Surendranagar Underground Sewage
Project, for which defendant No.3 applied with the
plaintiff for the supply of electrical energy. Exhibit 50 is
an application which undisputedly mentions the name
of applicant as Chief Officer, Surendranagar
Municipality Surendranagar. The application also
stipulates that defendant No.3 agreed to take supply
and pay for this energy, service connection and other
dues, including the deposit of such security as to be
demanded by the Plaintiff Board. Exhibits 42 and 43
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are the agreements executed between the plaintiff and
defendant No.3 for supply of 375 KVA load and 130
KVA load respectively. The contention of the learned
advocate for the appellants is mainly that though the
agreements have been signed by defendant Nos.1 and
2, the contracting parties are plaintiff and defendant
No.3, as defendant No.3 was the Principal who
undertook the work of laying underground sewage.
Defendant Nos.1 and 2 being an agent of defendant
No.3 cannot be held liable for the minimum used
charges as claimed by the plaintiff. Upon perusal of
Exhibits 42 and 43, it is found that the plaintiff except
the supply of electric load, all other terms and
conditions are same. Therefore, for the purpose of
convenience, condition No.2(b) of Exhibit 42 is
reproduced hereunder for the sake of convenience:
"2(b) If the supplier is ready to commence supply save
in respect of any work or works remaining to be done on
the consumer's premises due to non-completion of
suitable accommodation and / or in complete work of the
consumer to receive supply the consumer shall be liable
to pay the amount of minimum guarantee as hereinafter
provided as if the supply is actually commenced from the
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date of expiration of said notice of three months unless
the General Manager (Comm.) has granted any extension
of time as provided in sub-clasue (a) above."
* The aforesaid clause binds defendant No.3 that
the consumer namely defendant No.3 shall be liable to
pay the amount of minimum guarantee charges. Under
the head of charges for supply at page No.4 of Exhibit
42, the defendant No.3 has agreed to pay to the
supplier every month which includes minimum charges
mentioned in the Supplier's Tariff Schedule. On
scrutinizing the entire evidence, the execution of
agreements Exhibits 42 and 43 are not in dispute.
12. The only dispute is with regard to whether defendants
jointly and severally can be held liable for the demand
of minimum charges. If the case of defendants is
perused, defendant Nos.1 and 2 have projected
themselves as an agent of defendant No.3. Though
defendant No.3 has not stepped into the witness box,
the burden of payment of minimum charges has been
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thrown upon defendant Nos.1 and 2 as defendant
Nos.1 and 2 were entrusted the work of laying down
underground sewage. For non-compliance of the work,
defendant No. 3 has tried to escape from the liability of
payment of minimum charges to the plaintiff. The
application for supply of electric load was undisputedly
applied by defendant No.3 and defendant No.3 is
termed as a consumer as mentioned in the preamble of
agreements.
13. At this stage, relevant provisions as contemplated
under the Indian Contract Act, 1872 are required to be
considered. Section 211 of the Act deals with agent's
duty in conducting principal's business. Section 211 of
the Act is reproduced hereunder:
"211. Agent's duty in conducting principal's
business.--
An agent is bound to conduct the business of his
principal according to the directions given by the
principal, or, in the absence of any such directions,
according to the custom which prevails in doing business
of the same kind at the place where the agent conducts
such business. When the agent acts otherwise, if any
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loss be sustained, he must make it good to his principal,
and if any profit accrues, he must account for it."
* The aforesaid provision contemplates that the
agent is bound to conduct the business of his
principal according to the directions given by the
principal and when the agent acts otherwise, if any
loss is sustained, the agent must make it good to his
principal. Similarly, if any profit accrues out of the
acts done by agent, he must account for it to the
principal.
14. In the present case, as evident from the record that the
test report was to be submitted by defendant Nos.1
and 2 and the same, admittedly, were not supplied by
defendant Nos.1 and 2 though demanded by plaintiff. It
is not the case of the defendant Nos.1 and 2 that the
work which was entrusted by the principal-defendant
No. 3 was successfully concluded. Since the evidence
does not indicate with regard to the completion of
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project, it can be presumed that the work remained
incomplete for one reason or the other. Agreements, in
the present case, in clear terms make the consumer
liable to pay minimum charges and when such
minimum charges are not paid by the consumer,
defendant No.3 - the consumer is liable for payment of
such amount. Similarly, defendant Nos.1 and 2 being
the agent of defendant No.3 and being the signatory of
the agreements, equally cannot escape from the
liability of payment of minimum charges. The Contract
Act deals with agent's duty to principal as well as
principal's duty to agent. Section 222 of the Indian
Contract Act, 1872 deals with indemnification of agent
against consequences of lawful acts. Section 222 of the
Act is reproduced hereunder:
"222. Agent to be indemnified against
consequences of lawful acts.--
The employer of an agent is bound to indemnify him
against the consequences of all lawful acts done by such
agent in exercise of the authority conferred upon him."
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* The aforesaid provision mandates that the agent
is bound to be indemnified by the principal against the
consequences of all lawful acts in exercise of the
authority conferred upon him.
15. Learned trial Court after appreciating the evidence
found that all defendants are jointly and severally
liable to pay the amount of minimum charges as
demanded by plaintiff. During the course of
submissions, I have been informed that defendant No.3
has not assailed the impugned judgment and decree
and, therefore, the impugned judgment and decree has
attained finality qua defendant No.3.
16. Learned advocate for the appellant could not point out
any proposition of law on the question that the terms
and conditions of the agreements are not binding
merely on signing the agreements. In my view, a
person who signs a contract is legally bound by the
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terms and conditions of the contract. Such party is
legally responsible for fulfilling the terms and
conditions outlined in the contract. In the present case,
defendant Nos.1 and 2 have asserted that defendant
No.3 appointed them as agent and defendant No.3 also
affirms that defendant Nos.1 and 2 were the agent. It is
not the case of defendant Nos.1 and 2 that the
agreements were signed under misrepresentation or
the agreements were executed by practiced upon
fraud. Since both the agreements are legally and
validly executed, defendant Nos.1 and 2 cannot escape
their liability to pay any amount for the breach of any
terms and conditions of agreements.
17. Learned Advocate for the appellant has further
submitted that the decreetal amount has been
deposited by the appellant before the learned trial
Court. A decree of jointly and severely liable to pay
means more than one defendants are responsible for
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the entire decreetal amount. The judgment holder is
permitted to recover the entire decreetal amount
from any of the judgment debtor or from all of them
together. Even if one of the judgment debtor cannot
pay, while paying party can then seek reimbursement
from other judgment debtors for their share. The
judgment debtor who has paid more than its share,
can then claim reimbursement for the portion by way
of filing execution against the other judgment debtor.
Therefore, appellant may recover the amount paid
more than its share from original defendant No.3 if
permissible under law.
18. In the aforesaid facts and in absence of any contrary
evidence as well as in absence of any provisions of law,
I do not find any reason to interfere in the findings
arrived at by learned trial Court. Resultantly, the
appeal lacks merit and it deserves to be dismissed and
accordingly it is dismissed.
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19. Record & Proceedings, if any, be sent back to the
concerned Court forthwith. Interim Relief, if any, stands
vacated forthwith. No order as to costs.
(D. M. DESAI,J)
VATSAL
